Bookkeeping for your first year of self employment
If you're starting self-employment in the US, your first year creates records you will use again: the money you put into the business, the equipment you start with and the way customer payments reach you. Getting those details clear now gives you a useful starting point for the rest of the year.
Arkrel helps you review bank and card statements, organize merchant decisions and prepare records for your tax preparer. Try one statement free, review its merchants and preview My year. No card needed.
Write down the starting point of the business
Create a short opening note with the work you do, when you began operating and the accounts you have used. Include an account that was used only briefly, such as a personal card you used before setting up a business account. Note where customer invoices, payment-provider reports and receipts are stored.
Keep purchases from before you began operating in a separate review list. Record what you bought, when you paid and why it related to starting the business. For equipment, also note when you began using it and whether you use it personally.
The IRS discusses startup costs and longer-lived business property separately in Publication 583. Bring those records to your preparer so the treatment is based on what happened, rather than the merchant name alone.
Keep delayed or cancelled opening plans with the original purchase records
If opening was delayed, keep the revised dates and explain what changed in your opening note. Connect a cancelled lease, unused service, returned item or purchase redirected to another purpose with its original invoice or agreement. Keep an expected refund separate from one that actually arrived.
For a cost covering a period before and after opening, retain the service period alongside the payment date. Preserve the dates you became ready to operate and began serving customers when they differ, with the documents that explain the activity between them.
If the business never opened, tell your preparer clearly. Keep the records of what you explored, what you bought and when the plan ended. Those facts need their own review rather than being treated as though the business had begun operating.
When preparation crosses a year end, keep payments filed by their actual dates and retain the timeline linking them to the opening plans. Give your preparer both years' source records when needed. A statement date or a merchant category by itself does not establish the amount or year of a deduction.
Give each type of incoming money an explanation
A new business account may receive customer payments, money transferred from your own savings and loan proceeds. Before reviewing the year, make a simple list explaining the source of each unfamiliar deposit.
For your own transfers, keep the corresponding record from the sending account. For a loan, keep the agreement and repayment details. For customer payments, retain the invoice or payment record. This opening history helps you and your preparer understand why money entered the account.
If early business purchases share a statement with everyday spending, work through the business and personal expense guide. Start with the actual purpose of each purchase, especially when you use the same merchant for both.
Test one complete statement period
Choose a statement that includes activity you remember. Upload it to Arkrel and review the transactions grouped by merchant. Use the receipts and opening note to resolve entries you cannot explain from the description. Confirmed rules remember your decisions for later reviews.
After that first review, ask whether the records answer three practical questions: where the money came from, what each business purchase was for and what still needs your preparer's attention. Keep unresolved items in a short question list with their dates and source documents.
The free experience includes one statement upload, merchant review and a My year preview. Full tax reports, downloads, exports and accountant sharing require a paid plan.
Choose a routine you can repeat
Decide where statements will be saved and who will review them. Give receipts, customer-payment records and questions a consistent home. A useful first-year routine leaves you able to find a source document when you need it.
Autopilot is $59 per month with a 30-day money-back guarantee and covers the current calendar year. The monthly bookkeeping page explains the recurring statement workflow. If you want to organize a defined tax year, Catch-Up is $599 one time per purchased tax year for 12 months of access, with a 30-day money-back guarantee.
Make the first handoff explain the business
Give your preparer a clear account of how the business began. Alongside the report, include the opening note, account list, startup-purchase list, equipment records and unresolved questions. Use the accountant document checklist for the rest of the package.
Arkrel's paid tax report includes a profit and loss summary, Schedule C totals and likely deductions to review. Give your preparer the supporting records and context needed to review those figures and the first-year decisions behind them.
Questions about your first self employed year
What if I started partway through the year?
Record the start date and gather the statements containing business activity. Keep earlier startup purchases separately identified for review, and note any accounts you began or stopped using during the year.
How should I organize money I put into the business myself?
Keep a record of its source and the transfer between accounts. Label it clearly in your working notes so your preparer can distinguish it from customer payments.
What should I keep for my first equipment purchases?
Save the invoice, payment record, purchase date, date you began using the item and information about business and personal use. Ask your preparer to determine the appropriate tax treatment.
Can I begin before I have a full year of statements?
Yes. Start the Arkrel evaluation with one complete statement. Use what you learn to organize the remaining records and establish the next review date.
Can I download the tax report for free?
The free experience covers one statement, merchant review and a My year preview. The full tax report, downloads, exports and accountant sharing are paid.
Start with the first statement you can explain
Bring one statement and the records behind it. See how the review fits your business before choosing a plan.